Steam co-founder Gabe Newell has spoken candidly with a class at the University of Texas' LBJ School of Public Affairs, saying that rather than next-gen consoles, it's Apple that will be the biggest challenge as Valve tries to bring Steam and the Steam Box into the lounge room.

The threat right now is that Apple has gained a huge amount of market share, and has a relatively obvious pathway towards entering the living room with their platform. I think that there's a scenario where we see sort of a dumbed-down living room platform emerging — I think Apple rolls the console guys really easily. The question is can we make enough progress in the PC space to establish ourselves there, and also figure out better ways of addressing mobile before Apple takes over the living room?

Newell said that any PC manufacturer hoping to make a move into the lounge room will need to hype the strengths of the PC hardware platform. Factors such as hard drive space, form factors that can be customised for the individual, integration of existing hardware and easy upgrades will be the key selling points.

The concern for Newell is that Apple will make the transition before its competitors. Apple's closed platform, he says, will stymie the open-source creativity that Steam hopes to foster.

"The biggest challenge, I don't think is from the consoles," Newell said. "I think the biggest challenge is that Apple moves on the living room before the PC industry sort of gets its act together."